If you or your employees use a vehicle for work, you’ll likely need a type of business insurance called commercial auto insurance. While rates vary, the average policy costs between $142 and $187 per month. Of course, your costs will depend on various factors, some that you can control and others that you can’t. We’ll dive deeper into the average commercial auto insurance costs you can expect to pay for your work vehicles.
According to Progressive Commercial Insurance, the 2020 national average cost of commercial car insurance is $187 per month for both business auto and commercial customers. The massive insurer lists rates for business autos in services (such as cleaners, restaurants and shops) at $188 per month, while contractors like carpenters and electricians pay $186 per month on average.
Another insurer, Insureon, says the median cost for commercial car insurance is $142 per month. That’s $1,704 annually, though some insurance carriers price policies on a six-month basis. (Progressive’s median price was listed at $153, which is closer to the Insureon number.)
Insureon states that its premium price is for $1 million in coverage, but you’d need to get a quote to discuss policy options like comprehensive and collision coverage. Progressive says both comprehensive and collision coverage are included, but you’d need to get a quote to determine the liability limit amounts.
As you can see, many factors affect the average cost of commercial auto insurance, and each carrier prioritizes what it views as the most important options and coverages.
You can tell by the variation in average and median insurance costs that many factors affect policy pricing. Just as with choosing any type of business insurance, you have to consider many variables about your business and the vehicle you’re insuring to get an accurate quote.
These are some variables that affect commercial auto insurance rates:
To get an accurate estimate, work with your insurance carrier on a quote that considers all pertinent details about the vehicles and drivers.
The best liability insurance providers will rate your premium based on the driver with the worst driving record, to cover the biggest risks. Consider assigning the drivers with the worst records to the least expensive vehicles.
Commercial auto insurance is more expensive than personal car insurance. According to PolicyGenius, the average personal auto insurance policy is about $137 per month, or $1,652 annually. With such a discrepancy, many small business owners look for ways to keep costs down, since commercial auto insurance can be an expensive line item in a budget.
Here are some tips to keep your commercial auto insurance costs down:
Don’t choose your commercial auto insurance policy based solely on price. While you want to get the best deal, it’s even more critical to ensure your business is protected from the various risks that come with driving commercial vehicles.
It’s essential to choose the proper coverage protections, including sufficient liability, comprehensive and collision coverage that will pay for damages to your vehicle – or replace it if needed. You’ll also want to get rental coverage so that your business activities don’t grind to a halt when your commercial vehicle is in the shop.
Remember that the best commercial insurance isn’t always the cheapest; it’s the one that provides the most robust financial protections for you and your business and is there for you when you file an insurance claim.